The Handbook of Innovation and Services
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The Handbook of Innovation and Services

A Multi-disciplinary Perspective

Edited by Faïz Gallouj and Faridah Djellal

This Handbook brings together 49 international specialists to address an issue of increasing importance for the world’s post-industrial economies; innovation as it relates to services.
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Chapter 16: Innovation and Employment in Services

Rinaldo Evangelista and Maria Savona


Rinaldo Evangelista and Maria Savona1 16.1 Introduction This chapter addresses some of the key theoretical and empirical issues related to the role of innovation to explain the dynamics of employment in services. This is a very ambitious aim: the effect of innovation on employment is generally complex and this complexity increases in the case of the service sector. This is mainly because the theories, concepts, definitions and methodological tools available have been developed with (explicit or implicit) reference to the manufacturing industry, and rely on a narrow and technology-based concept of innovation. It is well known that the effects exerted by technological change on employment are at the centre of the theoretical and empirical dispute in economic theory that goes back to the beginnings of this discipline and, after more than two centuries, is still unresolved. We start with the perhaps rhetorical, but not trivial question of why we should focus on the service sector to study the innovation–employment relationship. There are two answers to this question. The first and most obvious response is that services, and particularly the analysis of the economic effects of innovation in services, have been rather overlooked in economics. Although services is the fastest-growing sector in advanced economies, our understanding of the specific role of innovation in fuelling the process of tertiarisation and employment growth remains rather vague and fragmented, based more on impressions and anecdotes than on robust and theoretically grounded empirical evidence. The second justification for the focus on services is associated...

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